As 2013 draws to a close, Monitor foreign correspondents look back on the global stories that had the greatest impact on the regions they cover. These stories, and the deeper trends that they reflect, are certain to remain in the headlines into the new year. We bring you tales of military posturing, democratic backsliding, and the death of a strongman. Watch this space for more in 2014. And click on the list of stories on the left hand side of this article for more year in review pieces from around the world.

Asia ended the year as it had begun, stirred by fears of a territorial dispute between the region's two economic and military giants – China and Japan – that could spin dangerously out of control.

In January, Tokyo complained that a Chinese frigate had locked its weapons-guiding radar onto a Japanese destroyer and helicopter in a threatening manner. At the end of the year, Japan was complaining bitterly about China's declaration of an "air defense identification zone" (ADIZ) over the islands in dispute.

Neither side wants a fight over the East China Sea islands known here as the Diaoyu and in Japan as the Senkaku, however much oil and gas might lie beneath their surrounding waters. But the angry confrontation, which has dragged on for more than a year, is worrying for several reasons.

For a start, there is the risk of a simple accident. A lot of Chinese and Japanese pilots and sailors are flying and sailing around the islands in close quarters. A collision or a miscalculation could have momentous consequences.

The butting of heads is also strengthening the hands of hawks in both countries. The Japanese government has approved a national security strategy of "proactive pacifism," as Prime Minister Shinzo Abe calls it, that will beef up its armed forces and expand their role. China's ADIZ is a gambit by the People's Liberation Army to extend its regional influence.

The wider region sees Beijing's belligerent assertion of its territorial rights as a sign of things to come from China. Southeast Asian nations, several of which have their own territorial disputes with Beijing in the South China Sea, are not persuaded by China's rhetoric about its "peaceful rise."

They are making little secret of their relief that Washington is talking up its Pacific presence and promising to "rebalance" its military and diplomatic focus toward Asia. One small but telling example is that the United States is helping Vietnam, which has overlapping claims with China, to expand its maritime patrol fleet.

Behind the bluster, though, trade between China and Japan is almost back to the level it was at 18 months ago, before the islands crisis broke out, and diplomats say that "people to people" exchanges – especially student visits, are quietly picking up after nearly a year on ice.

Expect more of the same in 2014. It is hard to see Mr. Abe backing off from Japan's insistence that there is nothing to discuss about the islands. China will not accept anything less than an acknowledgment that a territorial dispute exists. Until it wins that point, Beijing will keep trying to chip away at Japan's sovereignty, with all the risks that entails.